EXHIBIT 10.1
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 25, 2006
among
DELPHI FINANCIAL GROUP, INC.
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agent
HSBC BANK USA, NATIONAL ASSOCIATION,
as Co-Documentation Agent,
U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent,
KEYBANK NATIONAL ASSOCIATION,
as Co-Documentation Agent
and
The Other Lenders Party Hereto
WACHOVIA CAPITAL MARKETS, LLC, Joint Lead Arranger
BANC OF AMERICA SECURITIES LLC,
Joint Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS............................... 1
1.01 Defined Terms................................................... 1
1.02 Other Interpretive Provisions................................... 20
1.03 Accounting Terms................................................ 21
1.04 Rounding........................................................ 21
1.05 References to Agreements and Laws............................... 21
1.06 Times of Day.................................................... 21
ARTICLE II THE COMMITMENTS AND LOANS..................................... 21
2.01 Loans........................................................... 21
2.02 Borrowings, Conversions and Continuations of Loans.............. 22
2.03 Prepayments..................................................... 23
2.04 Termination or Reduction of Commitments......................... 24
2.05 Repayment of Loans.............................................. 24
2.06 Interest........................................................ 24
2.07 Fees............................................................ 25
2.08 Computation of Interest and Fees................................ 25
2.09 Evidence of Debt................................................ 25
2.10 Payments Generally; Administrative Agent's Clawback............. 26
2.11 Sharing of Payments by Lenders.................................. 27
2.12 Increase in Commitments......................................... 28
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY....................... 29
3.01 Taxes........................................................... 29
3.02 Illegality...................................................... 31
3.03 Inability to Determine Rates.................................... 31
3.04 Increased Costs................................................. 32
3.05 Compensation for Losses......................................... 33
3.06 Mitigation Obligations; Replacement of Lenders.................. 34
3.07 Survival........................................................ 34
ARTICLE IV CONDITIONS PRECEDENT TO LOANS................................. 34
4.01 Conditions of Initial Loan...................................... 34
4.02 Conditions to all Loans......................................... 36
ARTICLE V REPRESENTATIONS AND WARRANTIES................................. 36
5.01 Existence, Qualification and Power; Compliance with Laws........ 36
5.02 Authorization; No Contravention................................. 36
5.03 Governmental Authorization; Other Consents...................... 37
5.04 Binding Effect.................................................. 37
5.05 Financial Statements; No Material Adverse Effect................ 37
5.06 Litigation and Guarantees....................................... 39
5.07 No Default...................................................... 39
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TABLE OF CONTENTS
(continued)
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5.08 Ownership of Property; Liens.................................... 39
5.09 Environmental Compliance........................................ 39
5.10 Taxes........................................................... 39
5.11 ERISA Compliance................................................ 39
5.12 Subsidiaries.................................................... 40
5.13 Margin Regulations; Investment Company Act...................... 40
5.14 Disclosure...................................................... 40
5.15 Compliance with Laws............................................ 41
5.16 Proceeds........................................................ 41
5.17 Insurance....................................................... 41
5.18 Governmental Authorizations..................................... 41
5.19 Solvency........................................................ 41
5.20 Insurance Licenses.............................................. 41
5.21 No Default...................................................... 41
5.22 Securities Laws................................................. 42
5.23 Replacement of Schedules........................................ 42
ARTICLE VI AFFIRMATIVE COVENANTS......................................... 42
6.01 Reports, Certificates and Other Information..................... 42
6.02 Payment of Obligations.......................................... 46
6.03 Preservation of Existence, etc.................................. 46
6.04 Maintenance of Properties....................................... 47
6.05 Maintenance of Insurance........................................ 47
6.06 Compliance with Laws; Material Contractual Obligations.......... 47
6.07 Books and Records............................................... 47
6.08 Inspection Rights............................................... 47
ARTICLE VII NEGATIVE COVENANTS........................................... 47
7.01 Liens........................................................... 48
7.02 Consolidation, Merger, etc...................................... 49
7.03 Asset Disposition, etc.......................................... 49
7.04 Dividends, etc.................................................. 50
7.05 Investments..................................................... 50
7.06 Take or Pay Contracts........................................... 51
7.07 Regulation U.................................................... 51
7.08 Subsidiaries.................................................... 51
7.09 Other Agreements................................................ 51
7.10 Business Activities............................................. 52
7.11 Transactions with Affiliates.................................... 52
7.12 Ownership of RSL and Safety National............................ 52
7.13 Consolidated Net Worth.......................................... 52
7.14 Debt to Capital................................................. 52
7.15 Risk-Based Capital Ratio........................................ 52
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TABLE OF CONTENTS
(continued)
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7.16 Pro Forma Risk-Based Capital.................................... 52
7.17 Subsidiary Indebtedness......................................... 53
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES.............................. 53
8.01 Events of Default............................................... 53
8.02 Remedies Upon Event of Default.................................. 55
8.03 Application of Funds............................................ 55
ARTICLE IX ADMINISTRATIVE AGENT.......................................... 56
9.01 Appointment and Authority....................................... 56
9.02 Rights as a Lender.............................................. 56
9.03 Exculpatory Provisions.......................................... 56
9.04 Reliance by Administrative Agent................................ 57
9.05 Delegation of Duties............................................ 57
9.06 Resignation of Administrative Agent............................. 57
9.07 Non-Reliance on Administrative Agent and Other Lenders.......... 58
9.08 No Other Duties, Etc............................................ 58
9.09 Administrative Agent May File Proofs of Claim................... 58
ARTICLE X MISCELLANEOUS.................................................. 59
10.01 Amendments, Etc................................................. 59
10.02 Notices; Effectiveness; Electronic Communication................ 60
10.03 No Waiver; Cumulative Remedies.................................. 62
10.04 Expenses; Indemnity; Damage Waiver.............................. 62
10.05 Payments Set Aside.............................................. 64
10.06 Successors and Assigns.......................................... 64
10.07 Treatment of Certain Information; Confidentiality and Non-Use... 67
10.08 Right of Setoff................................................. 68
10.09 Interest Rate Limitation........................................ 68
10.10 Counterparts; Integration; Effectiveness........................ 69
10.11 Survival of Representations and Warranties...................... 69
10.12 Severability.................................................... 69
10.13 Replacement of Lenders.......................................... 69
10.14 No Advisory or Fiduciary Responsibility......................... 70
10.15 Governing Law; Jurisdiction; etc................................ 71
10.16 Waiver of Jury Trial............................................ 72
10.17 USA PATRIOT Act Notice.......................................... 72
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SCHEDULES
2.01 Commitments and Applicable Percentages
5.05 Dividends
5.06 Litigation
5.12 Subsidiaries
7.01 Existing Liens
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
Form of
A Loan Notice
B Note
C Compliance Certificate
D Assignment and Assumption
E Opinion
1
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is entered
into as of October 25, 2006 among DELPHI FINANCIAL GROUP, INC., a Delaware
corporation (the "Borrower"), each lender from time to time party hereto (each a
"Lender" and collectively the "Lenders") and BANK OF AMERICA, N.A., as
Administrative Agent.
WHEREAS, the Borrower, certain lenders and Bank of America, N.A., as
Administrative Agent, are parties to a Credit Agreement dated as of May 26, 2005
(the "Existing Credit Agreement");
WHEREAS, the Borrower has requested certain amendments to the Existing
Credit Agreement;
WHEREAS, the Lenders and the Administrative Agent are willing to agree to
such amendments, as hereinafter set forth;
NOW THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree that the Existing Credit Agreement is hereby amended to
state in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:
"2005 Annual Statements" - see Section 5.05(a)(ii).
"2006 Quarterly Statements" - see Section 5.05(a)(ii).
"Acquired Person" shall mean any Person acquired upon the consummation of
an Acquisition permitted by the terms of this Agreement.
"Acquisition" shall mean any transaction or series of transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or equity securities (or warrants,
options, or other rights to acquire any of the foregoing) of any Person, or
otherwise causing any Person to become a Subsidiary of the Borrower, or (c) a
merger or consolidation or any other combination of the Borrower or one of its
Subsidiaries with another Person (other than a Person that is a Subsidiary of
the Borrower immediately prior to such merger or consolidation); provided that
the Borrower or such Subsidiary is the surviving entity, in each case subject to
and to the extent permitted by the terms of this Agreement.
"Adjusted Capital" shall mean, as to any of the Reliance Standard Insurance
Companies as of any date, the total amount shown on line 29, page 23, column 1
of the Annual Statement of each of the Reliance Standard Insurance Companies
and, as to Safety National as of any date, the
total amount shown on line 27, page 18, column 1 of the Annual Statement of
Safety National, or, in each case, an amount determined in a consistent manner
for any date other than one as of which an Annual Statement is prepared.
"Administrative Agent" shall mean Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" shall mean the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
specify to the Borrower and the Lenders.
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" shall mean, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with such Person. "Control" shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
"Agent-Related Persons" shall mean the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Commitments" shall mean aggregate amount of the Commitments of
all the Lenders.
"Agreement" - see the introductory paragraph.
"Annual Statement" shall mean, as to any insurance company, the annual
financial statement of such insurance company as required to be filed with the
Department, together with all exhibits or schedules filed therewith, prepared in
conformity with SAP. References to amounts on particular exhibits, schedules,
lines, pages and columns of the Annual Statement are based on the format
promulgated by the NAIC for 2005 Life, Accident and Health Insurance Company
Annual Statements or 2005 Property and Casualty Insurance Company Annual
Statements, as applicable. If such format is changed in future years so that
different information is contained in such items or they no longer exist, it is
understood that the reference is to information consistent with that reported in
the referenced item in the 2005 Annual Statement of such insurance company.
"Applicable Insurance Codes" shall mean, as to any insurance company, the
insurance code of any state where such insurance company is domiciled or doing
insurance business and any successor statute of similar import, together with
the regulations thereunder, as amended or
2
otherwise modified and in effect from time to time. References to sections of
the Applicable Insurance Code shall be construed to also refer to successor
sections.
"Applicable Percentage" shall mean with respect to any Lender at any time,
the percentage (carried out to the ninth decimal place) of the Aggregate
Commitments represented by such Lender's Commitment at such time. If the
commitment of each Lender to make Loans has been terminated pursuant to Section
8.02 or if the Aggregate Commitments have expired, then the Applicable
Percentage of each Lender shall be determined based on the Applicable Percentage
of such Lender most recently in effect, giving effect to any subsequent
assignments. The initial Applicable Percentage of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Applicable Rate" means, from time to time, the following percentages per
annum, based upon the Debt Rating as set forth below:
APPLICABLE RATE
DEBT RATINGS EURODOLLAR RATE
PRICING LEVEL S&P/▇▇▇▇▇'▇ COMMITMENT FEE LOAN
------------- --------------------- -------------- ---------------
1 A-/A3 or better 0.080 0.400
2 BBB+/Baa1 0.100 0.500
3 BBB/Baa2 0.125 0.625
4 BBB-/Baa3 0.175 0.750
5 Less than or equal to 0.250 1.000
BB+/Ba1
"Debt Rating" shall mean, as of any date of determination, the rating
as determined by either S&P or ▇▇▇▇▇'▇ (collectively, the "Debt Ratings")
of the Borrower's non-credit-enhanced, senior unsecured long-term debt;
provided that if a Debt Rating is issued by each of S&P and ▇▇▇▇▇'▇, then
the higher of such Debt Ratings shall apply (with the Debt Rating for
Pricing Level 1 being the highest and the Debt Rating for Pricing Level 5
being the lowest), unless there is a split in Debt Ratings of more than one
level, in which case the Pricing Level that is one level lower than the
Pricing Level of the higher Debt Rating shall apply. If no Debt Rating is
in effect, Pricing Level 5 shall apply.
Initially, the Applicable Rate shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to Section 4.01(a)(vii).
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the date
immediately preceding the effective date of the next such change.
"Approved Fund" shall mean any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" shall mean Banc of America Securities LLC, in its capacity as
joint lead arranger and sole book manager.
3
"Assignee Group" shall mean two or more assignees that are Affiliates of
one another or two or more Approved Funds managed by the same investment
advisor.
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.06(b), and accepted by the Administrative Agent, in
substantially the form of Exhibit D or any other form approved by the
Administrative Agent.
"Attorney Costs" shall mean and include all reasonable fees and
disbursements of any law firm or other external counsel and the nonduplicative
allocated cost of internal legal services and disbursements of internal counsel.
"Attributable Indebtedness" shall mean, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" see Section 5.05(b).
"Availability Period" shall mean the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.04 and (c) the date of
termination of the commitment of each Lender to make Loans pursuant to Section
8.02(a).
"Bank of America" shall mean Bank of America, N.A. and its successors.
"Base Rate" shall mean for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 0.5% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors, including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" shall mean a Loan that bears interest based on the Base
Rate.
"Borrower" - see the introductory paragraph.
"Borrower Materials" - see Section 6.01.
"Borrowing" shall mean a borrowing consisting of simultaneous Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.
4
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Calculation Period" shall mean, with respect to any ratio or calculation,
the period for which such ratio or calculation is being calculated.
"Capital Securities" shall mean the 9.31% Capital Securities, Series A of
Delphi Funding L.L.C., the Floating Rate Capital Securities of Delphi Financial
Statutory Trust I and any other capital securities or other securities
constituting Hybrid Capital issued by (a) the Borrower or (b) a limited
liability company, business trust or similar entity, all of the common
securities (or equivalent thereof) of which are owned directly or indirectly by
the Borrower and which is formed solely for the purpose of issuing such capital
securities and investing the net proceeds of such issuance in debt securities of
the Borrower; provided that the Borrower's repayment obligations under such debt
securities relating to any such other capital securities or Hybrid Capital shall
be subordinated to the Obligations; and provided further that such capital
securities shall not have any maturities prior to the Maturity Date.
"Capital Securities Amount" shall mean the aggregate amount of the
obligations reflected on the consolidated balance sheet of the Borrower and its
Subsidiaries, calculated on a consolidated basis in accordance with GAAP,
relating to (i) debt securities which underlie Capital Securities and (ii) debt
securities which constitute Capital Securities.
"Cash Equivalents" shall mean (a) securities with maturities of six (6)
months or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b) certificates
of deposit, eurodollar time deposits, overnight bank deposits, bankers'
acceptances and repurchase agreements of any Lender or any other commercial bank
whose unsecured long-term debt obligations are rated at least BBB- by Standard &
Poor's or Baa3 by ▇▇▇▇▇'▇ having maturities of six (6) months or less from the
date of acquisition, and (c) commercial paper rated at least "A-2" by Standard &
Poor's or "P-2" by ▇▇▇▇▇'▇, or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of investments.
"Change in Control" shall be deemed to have occurred at such times as: (a)
the Borrower ceases to own, directly or indirectly, free and clear of all Liens,
at least 100% of the outstanding shares of voting stock and voting power of
Safety National and RSL on a fully diluted basis; (b) except for the Persons
referenced in clause (c) of this definition, any Person, or two or more Persons,
acting in concert, acquire beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended) of 40% or more of the voting power of the outstanding
voting stock of the Borrower on a fully diluted basis, (c) the Parent and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, together with their respective Affiliates, cease to beneficially own
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended) at least 33-1/3% of the
voting power of the outstanding voting stock of the Borrower on a fully diluted
basis; or (d) individuals who as of the Effective Date constitute the Borrower's
Board of Directors (together with any new director whose election by the
Borrower's Board of Directors or whose nomination
5
for election by the Borrower's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved), for any reason, cease to constitute a majority of the
directors at any time then in office.
"Change in Law" shall mean the occurrence, after the date of this
Agreement, of any of the following: (a) the adoption or taking effect of any
law, rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, guideline
or directive (whether or not having the force of law) by any Governmental
Authority.
"Closing Date" shall mean the first date on which all conditions precedent
in Section 4.01 are satisfied or waived (or, in the case of Section 4.01(b),
waived by the Person entitled to receive the applicable payment).
"Co-Arranger" shall mean Wachovia Securities, Inc., in its capacity as
joint lead arranger.
"Code" shall mean the Internal Revenue Code of 1986.
"Commitment" shall mean, as to each Lender, its obligation to (a) make
Loans to the Borrower pursuant to Section 2.01, in an aggregate principal amount
at any time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.
"Compliance Certificate" shall mean a certificate substantially in the form
of Exhibit C.
"Consolidated Equity" shall mean, with respect to the Borrower, the sum of
(a) stockholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis in accordance with GAAP, but excluding accumulated other
comprehensive income, plus (b) the Capital Securities Amount, to the extent that
such amount does not exceed 15% of the sum of (x) Consolidated Funded Debt (but
not including any of the Capital Securities Amount), plus (y) Consolidated Net
Worth, plus (z) the entire Capital Securities Amount.
"Consolidated Funded Debt" shall mean, without duplication, the sum of (a)
all Borrowings hereunder, (b) Indebtedness as defined under clauses (a) and (b)
of the definition thereof, and (c) Guarantees of Indebtedness as defined in
clauses (a) and (b) of the definition of "Indebtedness", all as calculated on a
consolidated basis in accordance with GAAP, but excluding the Capital Securities
Amount, to the extent that such amount would be included in Consolidated Equity
pursuant to the operation of the definition thereof.
"Consolidated Net Worth" shall mean, with respect to the Borrower, the
stockholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis in accordance with GAAP, but excluding accumulated other
comprehensive income.
6
"Contractual Obligation" shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" - see the definition of "Affiliate."
"Debt to Capital Ratio" shall mean, at any date of determination, the ratio
of (a) Consolidated Funded Debt to (b)(i) Consolidated Funded Debt, plus (ii)
Consolidated Equity of the Borrower.
"Debtor Relief Laws" shall mean the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" shall mean any event or condition that has not been cured or
waived and constitutes an Event of Default or that, with the giving of any
notice, the passage of time or both, would be an Event of Default.
"Default Rate" shall mean an interest rate per annum equal to (a) in the
case of any Eurodollar Rate Loan, the interest rate otherwise applicable thereto
plus 2%; and (b) in the case of any other Obligation, the sum of (i) the Base
Rate plus (ii) 2%; provided that the interest rate applicable to any Obligation
shall not at any time exceed the highest rate permitted by applicable Law.
"Defaulting Lender" shall mean any Lender that (a) has failed to fund any
portion of the Loans required to be funded by it hereunder within one Business
Day of the date required to be funded by it hereunder unless such failure has
been cured at the relevant time, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute or unless such failure has been cured at the relevant time,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"Department" - see Section 5.05(a)(i).
"Dollar" and "$" shall mean lawful money of the United States.
"Eligible Assignee" shall mean any Person that meets the requirements to be
an assignee under Section 10.06(b)(iii), (v) and (vi) (subject to such consents,
if any, as may be required under Section 10.06(b)(iii)).
"Environmental Laws" shall mean any and all Federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
7
"Environmental Liability" shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" shall mean (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Base Rate" - see the definition of "Eurodollar Rate."
"Eurodollar Rate" shall mean for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:
Eurodollar Base Rate
Eurodollar Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Base Rate" shall mean, for such Interest Period, the rate
per annum equal to the British Bankers Association LIBOR Rate ("BBA
LIBOR"), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent
from time to time) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, for Dollar deposits
(for delivery on the first day of such Interest Period) with a term
8
equivalent to such Interest Period. If such rate is not available at such
time for any reason, then the "Eurodollar Base Rate" for such Interest
Period shall be the rate per annum determined by the Administrative Agent
to be the rate at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America
and with a term equivalent to such Interest Period would be offered by Bank
of America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.
"Eurodollar Reserve Percentage" shall mean, for any day during any
Interest Period, the reserve percentage (expressed as a decimal, carried
out to five decimal places) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate
Loan shall be adjusted automatically as of the effective date of any change
in the Eurodollar Reserve Percentage.
"Eurodollar Rate Loan" shall mean a Loan that bears interest at a rate
based on the Eurodollar Rate.
"Event of Default" - see Section 8.01.
"Excluded Taxes" shall mean, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender's failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new Lending Office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 3.01(a).
"Existing Credit Agreement" - see the recitals.
"Federal Funds Rate" shall mean, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on
9
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" shall mean the letter agreement dated August 29, 2006 among
the Borrower, the Administrative Agent and the Arranger.
"Fiscal Quarter" or "FQ" shall mean any fiscal quarter of a Fiscal Year.
"Fiscal Year" or "FY" shall mean any period of twelve consecutive calendar
months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "2006 Fiscal Year") refer to the
Fiscal Year ending on December 31 occurring during such calendar year.
"Foreign Lender" shall mean any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is resident for tax
purposes. For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"FRB" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"FRSL" shall mean First Reliance Standard Life Insurance Company, a New
York insurance company.
"Fund" shall mean any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" shall mean generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" shall mean the government of the United States or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
"Guarantee" shall mean, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the "primary
10
obligor") in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness
or other obligation, or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness or other obligation of
the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person.
The amount of any Guarantee shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Hazardous Materials" shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hybrid Capital" shall mean securities treated as hybrid capital by S&P,
Moody's or AM Best Company.
"Indebtedness" shall mean, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all obligations
of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;
(b) all direct obligations of such Person arising under letters of credit
(including standby and commercial), bankers' acceptances, bank guaranties, and
similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;
(f) obligations under capital leases and Synthetic Lease Obligations; and
11
(g) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date. Indebtedness of a Person shall
not include Permitted Transactions of the Person.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnitees" - see Section 10.04(b).
"Information" - see Section 10.07.
"Interest Payment Date" shall mean (a) as to any Eurodollar Rate Loan, the
last day of each Interest Period applicable to such Loan and the Maturity Date;
provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December and the Maturity Date.
"Interest Period" means as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of
any Eurodollar Rate Loan) converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months or, if available to the
Lenders, nine months or, if acceptable to the Lenders, twelve months, as
selected by the Borrower in its Loan Notice provided that:
(i) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"Investment" shall mean, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, or
(b) a loan, advance or capital contribution to, Guarantee or assumption of debt
of, deposit with or purchase or other acquisition of any other debt or equity
participation or interest in, another Person, including any partnership or joint
venture interest in such other Person, other than, in either case, pursuant to
an Acquisition. For
12
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.
"Investment Grade Securities" shall mean non-equity securities which are
rated at least "NAIC 2" by the NAIC, "BBB-" by Standard & Poor's, "Baa3" by
Moody's, "BBB-" by Fitch Investor Services, Inc., or carrying an equivalent
rating by a nationally recognized rating agency, if each of the named rating
agencies cease publishing ratings of investments.
"IRS" shall mean the United States Internal Revenue Service. ---
"Laws" shall mean, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"Lender" - see the introductory paragraph hereto.
"Lending Office" shall mean, as to any Lender, the office or offices of
such Lender described as such in such Lender's Administrative Questionnaire, or
such other office or offices as a Lender may from time to time specify in
writing to the Borrower and the Administrative Agent.
"Licenses" - see Section 5.20; individually, a "License".
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement and any financing lease having substantially the same economic effect
as any of the foregoing, but excluding the interest of a lessor under an
operating lease).
"Litigation" shall mean any litigation (including, without limitation, any
governmental proceeding or arbitration proceeding), tax audit or investigative
proceeding, claim, lawsuit, and/or investigation pending or threatened against
or involving the Borrower, any of its Subsidiaries or other Affiliates or any of
its or their businesses or operations.
"Loan" - see Section 2.01.
"Loan Documents" shall mean this Agreement, each Note and the Fee Letter.
"Loan Notice" shall mean a notice of (a) a borrowing of Loans, (b) a
conversion of Loans from one Type to the other, or (c) a continuation of
Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall
be substantially in the form of Exhibit A.
13
"Material Adverse Change" or "Material Adverse Effect" shall mean any
change, event, action, condition or effect which individually or in the
aggregate (a) impairs the validity or enforceability of this Agreement, the
Notes, if any, or any other Related Document, or (b) materially and adversely
affects the consolidated business, assets, liabilities (actual or contingent),
condition (financial or otherwise), operations or prospects of the Borrower and
its Subsidiaries taken as a whole, or (d) impairs the ability of the Borrower or
any of its Subsidiaries to perform their respective obligations under this
Agreement or any of the Related Documents.
"Material Litigation" or "Material Litigation Development" shall mean any
Litigation, or development in any Litigation, as the case may be (a) which
involves this Agreement, any Related Document or other transactions contemplated
hereby or thereby, or (b) which could reasonably be expected to have a Material
Adverse Effect.
"Material Subsidiary" means, a Subsidiary whose (a) consolidated assets
exceed 5% of the consolidated assets of the Borrower and its Subsidiaries or (b)
whose consolidated revenues exceed 5% of the consolidated revenues of the
Borrower and its Subsidiaries, as of the end of or for the most recent Fiscal
Quarter for which financial statements have been delivered pursuant to Section
6.01(a) or (b).
"Maturity Date" shall mean October 25, 2011; provided, however, that if
such date is not a Business Day, the Maturity Date shall be the next preceding
Business Day.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"Multiemployer Plan" shall mean any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate makes or is obligated to make, or during the preceding five plan years
has made or been obligated to make, contributions.
"NAIC" shall mean the National Association of Insurance Commissioners, or
any successor organization.
"Net Income" shall mean, for any Person for any Calculation Period, the net
income (or loss) of such Person for such Calculation Period as determined in
accordance with GAAP.
"Non-Insurance Subsidiary" shall mean a Subsidiary of the Borrower that is
not engaged in the business of assuming insurance or reinsurance risk, and as of
the date hereof, shall include all Subsidiaries of the Borrower other than the
Reliance Standard Insurance Companies, Safety National, Safety First and Safety
National Re.
"Note" shall mean a promissory note made by the Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit B.
"Obligations" shall mean all advances to, and debts, liabilities,
obligations, covenants and duties of, the Borrower arising under any Loan
Document or otherwise with respect to any Loan, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against the Borrower or any Affiliate
thereof of any proceeding
14
under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.
"Organization Documents" shall mean, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" shall mean all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or under any other Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.
"Outstanding Amount" shall mean, on any date, the aggregate outstanding
principal amount of Loans after giving effect to any borrowings and payments
occurring on such date.
"Parent" shall mean ▇▇▇▇▇▇▇▇▇▇ & Company, a Delaware limited partnership.
"Participant" - see Section 10.06(d).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA
Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.
"Permitted Liens" - see Section 7.01.
"Permitted Transactions" shall mean (a) transactions in which an investor
sells U.S. Government Securities or mortgage-backed securities, including,
without limitation, securities issued by the Government National Mortgage
Association and the Federal Home Loan Mortgage Corporation, while simultaneously
contracting to repurchase the same or "substantially the same" (as determined by
the Public Securities Association and in accordance with GAAP) securities for a
later settlement, (b) transactions in which an investor lends cash to a primary
dealer and the primary dealer collateralizes the borrowing of the cash with
certain securities, (c) transactions in which an investor lends securities to a
primary dealer and the primary dealer collateralizes the borrowing of the
securities with cash collateral, and (d) transactions in which an investor makes
loans of securities to a broker dealer under an agreement requiring such loans
to be continuously secured by cash collateral or U.S. Government Securities.
15
"Person" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" shall mean any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Platform" - see Section 6.01.
"Qualification" shall mean, with respect to any certificate covering any
financial statements, a qualification to such certificate or financial
statements (such as a "subject to" or "except for" statement therein) (a)
resulting from a limitation on the scope of examination of such financial
statements or the underlying data, (b) as to the capability of the Person whose
financial statements are certified to continue operations as a going concern, or
(c) which could be eliminated by changes in financial statements or notes
thereto covered by such certificate (such as by the creation of or increase in a
reserve or a decrease in the carrying value of assets) and which if so
eliminated by the making of any such change and after giving effect thereto
would occasion a Default; provided, that neither of the following shall
constitute a Qualification: (i) a consistency exception relating to a change in
accounting principles with which the independent public accountants for the
Person whose financial statements are being certified have concurred; or (ii) a
qualification relating to the outcome or disposition of threatened Litigation,
pending Litigation being contested in good faith, pending or threatened claims
or contingencies which cannot be determined with sufficient certainty to permit
such financial statements to be unqualified.
"Reference Departments" shall mean the Department of the State of Illinois,
in the case of RSL, the State of Missouri, in the case of Safety National, the
State of New York, in the case of FRSL and the State of Texas, in the case of
RSL-Texas.
"Register" - see Section 10.06(c).
"Reinsurance Agreements" shall mean any agreement, contract, treaty,
certificate or other arrangement by which any of the Reliance Standard Insurance
Companies or Safety National agrees to transfer or cede to another insurer all
or part of the liability assumed or assets held by any one of the Reliance
Standard Insurance Companies or Safety National under a policy or policies of
insurance or under a reinsurance agreement assumed by any one of the Reliance
Standard Insurance Companies. Reinsurance Agreements shall include, but not be
limited to, any agreement, contract, treaty, certificate or other arrangement
which is treated as such by the applicable Department or Reference Department.
"Related Documents" shall mean the Notes, if any, and any and all other
documents or instruments furnished or required to be furnished pursuant to
Article IV, as the same may be amended or modified from time to time.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
16
"Reliance Standard Insurance Companies" shall mean RSL-Texas, RSL and FRSL.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than events for which the 30 day notice period has been
waived.
"Representatives" - see Section 10.07.
"Required Lenders" shall mean, as of any date of determination, Lenders
having more than 50% of the Aggregate Commitments or, if the Commitments have
been terminated, Lenders holding in the aggregate more than 50% of the Total
Outstandings; provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.
"Responsible Officer" shall mean the chief executive officer, president,
chief financial officer, executive vice president, treasurer or assistant
treasurer of the Borrower. Any document delivered hereunder that is signed by a
Responsible Officer shall be conclusively presumed to have been authorized by
all necessary corporate, partnership and/or other action on the part of the
Borrower and such Responsible Officer shall be conclusively presumed to have
acted on behalf of the Borrower.
"Risk-Based Capital Ratio" shall mean, with respect to any insurance
company, the ratio of Adjusted Capital of such insurance company to the Company
Action Level of such insurance company (as determined by the NAIC or the
applicable Reference Department). In the event that there is a conflict between
the Risk-Based Capital formulas adopted by the NAIC and the applicable Reference
Department, the calculation of the Reference Department shall govern.
"RSL" shall mean Reliance Standard Life Insurance Company, an Illinois
insurance company.
"RSL-Texas" shall mean Reliance Standard Life Insurance Company of Texas, a
Texas insurance company.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"Safety First" shall mean Safety First Insurance Company, an Illinois
insurance company.
"Safety National" shall mean Safety National Casualty Corporation, a
Missouri insurance corporation.
"Safety National Re" shall mean Safety National Re SPC, a Cayman Islands
insurance corporation.
"SAP" shall mean, as to any insurance company, the statutory accounting
practices prescribed or permitted by the Reference Department.
17
"SEC" shall mean the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Solvent", as to any Person on a particular date, shall mean that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liabilities
of such Person and its debts as they become absolute and matured, (c) such
Person is able to realize upon its assets and pay its debts and other
obligations, Guarantees and other commitments as they mature in the normal
course of business, (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature, (e) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged and (f) such Person has not made any transfer or incurred
any obligation, with the intent to hinder, delay or defraud either present or
future creditors of such Person. For the purposes of this definition, in
computing the amount of any Guarantee at any time, it is intended that such
Guarantee will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Statutory Financial Statements" - see Section 5.05(a)(i).
"Statutory Liabilities" shall mean, as to any of the Reliance Standard
Insurance Companies as of any date, the amount reported on line 26, page 3,
column 1 of the Annual Statement of each of the Reliance Standard Insurance
Companies and, as to Safety National as of any date, the amount reported on line
26, page 3, column 1 of the Annual Statement of Safety National, or, in each
case, an amount determined in a consistent manner for any date other than one as
of which an Annual Statement is prepared.
"Structured Notes" shall mean the Secured Portfolio Notes, Series 1998-1B
issued in 1998 by Bankers Trust Corporation (formerly Bankers Trust New York
Corporation) to certain Subsidiaries of the Borrower and any structured notes
hereafter acquired by the Borrower or any of its Subsidiaries, the return with
respect to which is linked, in whole or in part, to the performance of an
Investment portfolio, the underlying components of which, if treated for
purposes of Section 7.05(c)(ii) of this Agreement as direct Investments of the
Borrower or the applicable Subsidiary to the extent of their proportionate
interests therein, would not cause any violation of such Section.
"Subsidiary" of a Person shall mean a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of members of the board of directors or other governing body (other
than securities or interests having such power only by reason of the happening
of a contingency) are at the time beneficially owned, or the management of which
is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of the Borrower; provided, however, that the term
18
"Subsidiary" shall not refer to any Person where equity interests are held
solely by separate accounts of the Reliance Standard Insurance Companies in the
ordinary course of business.
"Subsidiary Indebtedness" shall mean (a) a Subsidiary's obligations (other
than to the Borrower or another Subsidiary) for borrowed money that are
evidenced by bonds, debentures, notes or bank credit agreements, other than
obligations in respect of (i) advances from a Federal Home Loan Bank or funding
agreement backed note programs and (ii) securities constituting Hybrid Capital
which are issued by a limited liability company, business trust or similar
entity, all of the common securities of which are owned, directly or indirectly,
by the Borrower and which is formed solely for the purpose of issuing such
securities; (b) Guarantees by a Subsidiary of obligations for borrowed money so
evidenced of another Person (other than the Borrower or a Subsidiary); (c)
Indebtedness owing by a Subsidiary to the Borrower, another Subsidiary or any
other Person incurred in support of obligations of a Subsidiary or such other
Person in connection with Hybrid Capital; and (d) Guarantees by a Subsidiary in
respect of obligations of another Subsidiary or any other Person incurred in
support of obligations of a Subsidiary or such other Person in connection with
Hybrid Capital.
"Swap Contract" shall mean (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" shall mean, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Synthetic Lease Obligation" shall mean the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
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"Tax Claim" - see Section 6.01(n).
"Tax Returns and Reports" shall mean all returns, reports and information
required to be filed with any Governmental Authority with regard to taxes.
"Taxes" shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Tersk Investment" shall mean the Investment by the Borrower and certain
Subsidiaries of the Borrower in equity interests and notes of Tersk LLC, a
Delaware limited liability company.
"Threshold Amount" shall mean $20,000,000.
"Total Outstandings" shall mean the aggregate Outstanding Amount of all
Loans.
"Type" shall mean, with respect to a Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" shall mean the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." shall mean the United States of America.
"U.S. Government Securities" shall mean obligations of, or obligations
guaranteed as to principal and interest by, the United States Government or any
agency or instrumentality thereof.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder" and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(iii) The term "including" is by way of example and not limitation.
The term "documents" includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
20
(c) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including."
(d) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP or SAP, as applicable, applied on a consistent basis, as
in effect from time to time, applied in a manner consistent with that used in
preparing the Audited Financial Statements, except as otherwise specifically
prescribed herein.
(b) If at any time any change in GAAP or SAP would affect the computation
of any financial ratio or requirement or the application of any provision set
forth in any Loan Document, and either the Borrower or the Required Lenders
shall so request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio, requirement or provision to
preserve the original intent thereof in light of such change in GAAP or SAP
(subject to the approval of the Required Lenders); provided that, until so
amended, such ratio, requirement or provision shall continue to be computed or
applied in accordance with GAAP or SAP, as applicable, prior to such change
therein and the Borrower shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP or SAP.
1.04 ROUNDING. Any financial ratio required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly provided
herein, references to Organization Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and references to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 TIMES OF DAY. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
ARTICLE II
THE COMMITMENTS AND LOANS
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2.01 LOANS. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a "Loan") to the Borrower
from time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender's Commitment; provided, however, that after giving effect to any
Borrowing, (i) the Total Outstandings shall not exceed the Commitments, and (ii)
the aggregate Outstanding Amount of the Loans of any Lender shall not exceed
such Lender's Commitment. Subject to the foregoing limits and the other terms
and conditions hereof, the Borrower may borrow under this Section 2.01, prepay
under Section 2.03, and reborrow under this Section 2.01. Loans may be Base Rate
Loans or Eurodollar Rate Loans, as further provided herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Borrowing, each conversion of Loans from one Type to the other,
and each continuation of Eurodollar Rate Loans shall be made upon the Borrower's
irrevocable notice to the Administrative Agent, which may be given by telephone
or email. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m. (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans; provided, however, that if
the Borrower wishes to request Eurodollar Rate Loans having an Interest Period
other than one, two, three or six months in duration as provided in the
definition of "Interest Period", the applicable notice must be received by the
Administrative Agent not later than 11:00 a.m. four Business Days prior to the
requested date of such Borrowing, conversion or continuation, whereupon the
Administrative Agent shall give prompt notice to the Lenders of such request and
determine whether the requested Interest Period is acceptable to all of them.
Not later than 11:00 a.m., three Business Days before the requested date of such
Borrowing, conversion or continuation, the Administrative Agent shall notify the
Borrower (which notice may be by telephone) whether or not the requested
Interest Period has been consented to by all the Lenders. Each telephonic or
email notice by the Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Administrative Agent of a written Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower.
Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall
be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in
excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Loan Notice (whether telephonic, email or written) shall specify (i)
whether the Borrower is requesting a Borrowing, a conversion of Loans from one
Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or
continued or to which existing Loans are to be converted, and (v) if applicable,
the duration of the Interest Period with respect thereto. If the Borrower fails
to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or
22
continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection. In the case of a Borrowing, each Lender shall make the
amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 1:00 p.m. on
the Business Day specified in the applicable Loan Notice. Upon satisfaction of
the applicable conditions set forth in Section 4.02 (and, if such Borrowing is
the initial Loan, Section 4.01), the Administrative Agent shall make all funds
so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. At any time that Base Rate
Loans are outstanding, the Administrative Agent shall notify the Borrower and
the Lenders of any change in Bank of America's prime rate used in determining
the Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Loans from
one Type to the other, and all continuations of Loans as the same Type, there
shall not be more than ten Interest Periods in effect with respect to Loans.
2.03 PREPAYMENTS. The Borrower may, upon notice to the Administrative
Agent, from time to time voluntarily prepay Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $1,000,000 or a higher integral multiple of
$1,000,000; and (ii) any prepayment of Base Rate Loans shall be in a principal
amount of $500,000 or a higher integral multiple of $100,000 (or the entire
principal amount thereof then outstanding). Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Applicable Percentage of the
applicable prepayment. If such a notice is given by the Borrower, the payment
amount specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all
accrued interest thereon, together with any additional amounts required
23
pursuant to Section 3.05. Each such prepayment shall be applied to the Loans of
the Lenders in accordance with their respective Applicable Percentage.
2.04 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon notice
to the Administrative Agent, terminate the Aggregate Commitments, or from time
to time permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof, and (iii) the Borrower shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments. The Administrative Agent will promptly notify the
Lenders of any such notice of termination or reduction of the Aggregate
Commitments. Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to its Applicable Percentage. All fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.
2.05 REPAYMENT OF LOANS. The Borrower shall repay to the Lenders on the
Maturity Date the aggregate principal amount of Loans outstanding on such date.
2.06 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate.
(b) (i) If any amount of principal of any Loan is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the
Borrower under any Loan Document is not paid when due (without regard to
any applicable grace periods), whether at stated maturity, by acceleration
or otherwise, then upon the request of the Required Lenders, such amount
shall thereafter bear interest at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event of
Default exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
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(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.07 FEES.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Applicable Percentage, a
commitment fee equal to the Applicable Rate times the actual daily amount by
which the Aggregate Commitments exceed the Outstanding Amount of Loans. The
commitment fee shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date. The
commitment fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect.
(b) Existing Credit Agreement. The Borrower shall pay to the Administrative
Agent for the account of the lenders under the Existing Credit Agreement all
accrued and unpaid commitment fees and utilization fees on the Closing Date.
(c) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
2.08 COMPUTATION OF INTEREST AND FEES. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.10(a),
bear interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
2.09 EVIDENCE OF DEBT. The Loans made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent
25
and each Lender shall be conclusive absent manifest error of the amount of the
Loans made by the Lenders to the Borrower and the interest and payments thereon.
Any failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error. Upon
the request of any Lender made through the Administrative Agent, the Borrower
shall execute and deliver to such Lender (through the Administrative Agent) a
Note, which shall evidence such Lender's Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.
2.10 PAYMENTS GENERALLY; ADMINISTRATIVE AGENT'S CLAWBACK.
(a) General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender's Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made
by the Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender's share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with Section
2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has
made such share available in accordance with and at the time required by Section
2.02) and may, in reliance upon such assumption, make available to the Borrower
a corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation and (B) in the case of a payment to be made by
the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower
and such Lender shall pay such interest to the
26
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to the Borrower the amount of such interest paid by
the Borrower for such period. If such Lender pays its share of the applicable
Borrowing to the Administrative Agent, then the amount so paid shall constitute
such Lender's Loan included in such Borrowing. Any payment by the Borrower shall
be without prejudice to any claim the Borrower may have against a Lender that
shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume
that the Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the Lenders the
amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender, in immediately available funds with interest thereon, for each day
from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater
of the Federal Funds Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available
to the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrower by the Administrative Agent because the
conditions to the applicable Loan set forth in Article IV are not satisfied or
waived in accordance with the terms hereof, the Administrative Agent shall
return such funds (in like funds as received from such Lender) to such Lender,
without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Loans, and to make payments pursuant to Section 10.04(c) are
several and not joint. The failure of any Lender to make any Loan or to make any
payment under Section 10.04(c) on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Loan or to make its payment under Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
2.11 SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it, and accrued interest
thereon greater than its pro rata share thereof as provided herein, then the
Lender receiving such greater proportion shall (a) notify the Administrative
Agent of such fact, and (b) purchase (for cash at face value) participations in
the
27
Loans, or make such other adjustments as shall be equitable, so that the benefit
of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Loans and other amounts owing them, provided that:
(i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and
(ii) the provisions of this Section shall not be construed to apply to
(x) any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of any of its Loans other than to the
Borrower or any Subsidiary thereof (as to which the provisions of this
Section shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.
2.12 INCREASE IN COMMITMENTS.
(a) Request for Increase. Provided there exists no Default, upon notice to
the Administrative Agent (which shall promptly notify the Lenders), the Borrower
may from time to time, request an increase in the Aggregate Commitments by an
amount (for all such requests) not exceeding $100,000,000; provided that [(i)]
any such request for an increase shall be in a minimum amount of $5,000,000, and
(ii) the Borrower may make a maximum of four such requests. At the time of
sending such notice, the Borrower (in consultation with the Administrative
Agent) shall specify the time period within which each Lender is requested to
respond (which shall in no event be less than ten Business Days from the date of
delivery of such notice to the Lenders).
(b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase. Any Lender
not responding within such time period shall be deemed to have declined to
increase its Commitment.
(c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall promptly notify the Borrower and each Lender of the
Lenders' responses to each request made hereunder. To achieve the full amount of
a requested increase and subject to the approval of the Administrative Agent
(which approval shall not be unreasonably withheld), the Borrower may also
invite additional Eligible Assignees to become Lenders pursuant to a joinder
agreement in form and substance satisfactory to the Administrative Agent and its
counsel.
(d) Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the
28
effective date (the "Increase Effective Date") and the final allocation of such
increase. The Administrative Agent shall promptly notify the Borrower and the
Lenders of the final allocation of such increase and the Increase Effective
Date.
(e) Conditions to Effectiveness of Increase. As a condition precedent to
such increase, the Borrower shall deliver to the Administrative Agent its
certificate dated as of the Increase Effective Date (in sufficient copies for
each Lender) signed by a Responsible Officer of the Borrower (i) certifying and
attaching the resolutions adopted by the Borrower approving or consenting to
such increase, and (ii) certifying that, before and after giving effect to such
increase, (A) the representations and warranties contained in Article V and the
other Loan Documents are true and correct on and as of the Increase Effective
Date, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such
earlier date, and except that for purposes of this Section 2.12, the
representations and warranties contained in subsections (a)(i) and (b)(i) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (d) and (a), respectively, of Section 6.01, and (B) no
Default exists. The Borrower shall borrow and/or prepay any Loans outstanding on
the Increase Effective Date (and pay any additional amounts required pursuant to
Section 3.05) to the extent necessary to keep the outstanding Loans ratable with
any revised Applicable Percentages arising from any nonratable increase in the
Commitments under this Section.
(f) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.11 to the contrary.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then, except in the case of any payment to a Lender as to which
such requirement is attributable to such Lender's failure to comply with the
requirements of subsection (e) of this Section 3.01, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender or, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall timely pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) Payment of Other Taxes by the Borrower. Without limiting the provisions
of subsection (a) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
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(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender within 30 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) paid by the Administrative Agent or such Lender, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank"
within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a "controlled foreign corporation" described in section
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881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal withholding
tax duly completed together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower to determine the
withholding or deduction required to be made.
(f) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its reasonable discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Taxes or Other Taxes giving rise
to such refund), net of all reasonable out-of-pocket expenses of the
Administrative Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This subsection shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrower or any other Person.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, or any Governmental Authority has imposed material restrictions
on the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the London interbank market, then, on notice thereof by such Lender
to the Borrower through the Administrative Agent, any obligation of such Lender
to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to
Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrower shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted. Each of
the initial Lenders represents and warrants that it has not, as of the date of
this Agreement, made any determination of the type referenced in the first
sentence of this Section 3.02, and is not aware of any basis for such a
determination, and each Eligible Assignee who subsequently becomes a Lender
pursuant to Section 10.06 shall be deemed to have made a representation and
warranty to such effect, as of the effective date of the applicable assignment.
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3.03 INABILITY TO DETERMINE RATES. If the Required Lenders in good faith
determine that for any reason in connection with any request for a Eurodollar
Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits
are not being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate
and reasonable means do not exist for determining the Eurodollar Base Rate for
any requested Interest Period with respect to a proposed Eurodollar Rate Loan,
or (c) the Eurodollar Base Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the
cost to such Lenders of funding such Loan, the Administrative Agent will
promptly so notify the Borrower and each Lender. Thereafter, the obligation of
the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Borrower may revoke any pending
request for a Borrowing of, conversion to or continuation of Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.
3.04 INCREASED COSTS.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in
by, any Lender (except any reserve requirement reflected in the Eurodollar
Rate);
(ii) subject any Lender to any tax of any kind whatsoever with respect
to this Agreement, or any Eurodollar Rate Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition
of, or any change in the rate of, any Excluded Tax payable by such Lender);
or
(iii) impose on any Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate
Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan), or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender, the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender in good faith determines that any
Change in Law affecting such Lender or any Lending Office of such Lender or such
Lender's holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender's capital or on
the capital of such Lender's holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by such Lender, to a
level below that which such Lender or such Lender's holding company could have
32
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender setting forth
the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in subsection (a) or (b) of this
Section and delivered to the Borrower shall be conclusive absent manifest error.
The Borrower shall pay such Lender the amount shown as due on any such
certificate within 30 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of such Lender's right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than six months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the six-month period referred to above shall be
extended to include the period of retroactive effect thereof).
3.05 COMPENSATION FOR LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the last
day of the Interest Period therefor as a result of a request by the Borrower
pursuant to Section 10.13;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Base Rate used in determining the
Eurodollar Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan was in fact so funded.
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3.06 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
3.01 or 3.04, as the case may be, in the future, or eliminate the need for the
notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrower may replace such Lender in accordance with Section
10.13.
3.07 SURVIVAL. All of the Borrower's obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO LOANS
4.01 CONDITIONS OF INITIAL LOAN. The amendment and restatement of the
Existing Credit Agreement and the obligation of each Lender to make its initial
Loan hereunder is subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer, each dated
the Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance satisfactory
to the Administrative Agent and each of the Lenders:
(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers as the
Administrative Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents;
34
(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that the Borrower is duly organized or
formed, and that the Borrower is validly existing, in good standing and
qualified to engage in business in each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires
such qualification, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
(v) a favorable opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, counsel to the Borrower
addressed to the Administrative Agent and each Lender, as to the matters
set forth in Exhibit E and such other matters concerning the Borrower and
the Loan Documents as the Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of the Borrower either (A)
attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by the Borrower and
the validity against the Borrower of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;
(vii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and (b)
have been satisfied, (B) that there has been no event or circumstance since
the date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect; and (C) the current Debt Ratings; and
(viii) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent or the Required Lenders reasonably may
require.
(b) Any fees required to be paid on or before the Closing Date shall have
been paid.
(c) The amounts outstanding under the Existing Credit Agreement shall have
been paid.
(d) Unless waived by the Administrative Agent, the Borrower shall have paid
all fees, charges and disbursements of counsel to the Administrative Agent to
the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).
(e) The Closing Date shall have occurred on or before November 15, 2006.
Without limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
35
4.02 CONDITIONS TO ALL LOANS. The obligation of each Lender to honor any
Loan Notice (other than a Loan Notice requesting only a conversion of Loans to
the other Type, or a continuation of Eurodollar Rate Loans) is subject to the
following conditions precedent:
(a) The representations and warranties of the Borrower contained in Article
V or any other Loan Document, or which are contained in any document furnished
at any time under or in connection herewith or therewith, shall be true and
correct in all material respects on and as of the date of such Loan, except for,
in the case of all Loans other than the initial Loan, the representation set
forth in Section 5.05(c) and except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct as of such earlier date.
(b) No Default shall exist, or would result from such proposed Loan or from
the application of the proceeds thereof.
(c) The Administrative Agent shall have received a Loan Notice in
accordance with the requirements hereof.
Each Loan Notice (other than a Loan Notice requesting only a conversion of
Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by
the Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 4.02(a) and (b) have been satisfied on and as
of the date of the applicable Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the
Lenders that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. The Borrower
is duly organized or formed, validly existing and, as applicable, in good
standing under the Laws of the jurisdiction of its organization or formation,
has all requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to own its assets and carry on its
business substantially as now conducted and execute, deliver and perform its
obligations under the Loan Documents, is duly qualified and is licensed and, as
applicable, in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license and is in compliance with all Laws
except, in each case referred to in clause (b)(i), (c) or (d), to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Borrower of each Loan Document have been duly authorized by
all necessary organizational action on the part of such Person and do not and
will not contravene the terms of any of such Person's Organization Documents;
conflict with or result in any breach or contravention of, or result in or
require the creation or imposition of any Lien under, any Contractual Obligation
to which such Person is a party or any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or violate any Law.
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5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval, consent,
exemption, authorization or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower of this Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by the
Borrower. This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of the Borrower
that is a party thereto, enforceable against the Borrower in accordance with its
terms.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) Statutory Financial Statements.
(i) The Annual Statements, or the quarterly statements, as the case
may be, of each of the Reliance Standard Insurance Companies and Safety
National including, without limitation, the provisions made therein for
investments and the valuation thereof, reserves, policy and contract claims
and Statutory Liabilities, in each case as filed with the appropriate
Governmental Authority of its state of domicile (the "Department") and
delivered to each Lender prior to the execution and delivery of this
Agreement, as of, and for the 2005 Fiscal Year, and as of the end of, and
for, the Fiscal Quarter ended June 30, 2006 (collectively, the "Statutory
Financial Statements"), have been prepared in accordance with SAP applied
on a consistent basis. Each such Statutory Financial Statement was in
compliance in all material respects with applicable law when filed. The
Statutory Financial Statements fairly present the financial condition, the
results of operations, changes in equity and changes in financial position
of each of the Reliance Standard Insurance Companies and Safety National as
of and for the respective dates and periods indicated therein in accordance
with SAP applied on a consistent basis. Except for liabilities and
obligations, including, without limitation, reserves, policy and contract
claims and Statutory Liabilities (all of which have been computed in
accordance with SAP), disclosed or provided for in the Statutory Financial
Statements, the Reliance Standard Insurance Companies and Safety National
did not have, as of the respective dates of each of such financial
statements any liabilities or obligations (whether absolute or contingent
and whether due or to become due) which, in conformity with SAP, applied on
a consistent basis, would have been required to be or should be disclosed
or provided for in such financial statements. All books of account of the
Reliance Standard Insurance Companies and Safety National fully and fairly
disclose, in all material respects, all of the transactions, properties,
assets, investments, liabilities and obligations of the Reliance Standard
Insurance Companies and Safety National and all of such books of account
are in the possession of each of the Reliance Standard Insurance Companies
and Safety National and are true, correct and complete in all material
respects.
(ii) The investments of each of the Reliance Standard Insurance
Companies and Safety National reflected in the Annual Statements filed with
the Department with respect to each of the Reliance Standard Insurance
Companies' and Safety National's 2005 Fiscal Year (the "2005 Annual
Statements"), as updated through the June 30, 2006
37
quarterly statements (the "2006 Quarterly Statements"), comply in all
material respects with all applicable requirements of the applicable
Department as to investments which may be made by such Reliance Standard
Insurance Company and Safety National.
(iii) The provisions made in the 2005 Annual Statements and in the
2006 Quarterly Statements for reserves, policy and contract claims and
Statutory Liabilities are in compliance in all material respects with the
requirements of the applicable Department and have been computed in
accordance with SAP.
(iv) Marketable securities and short term investments reflected, with
respect to the Reliance Standard Insurance Companies, in line 10, page 2,
column 3 and, with respect to Safety National, in line 10, page 2, column
3, of their respective 2005 Annual Statements and in the 2006 Quarterly
Statements are valued at cost, amortized cost or market value, as noted on
such Statutory Financial Statements and as required by applicable law.
(v) Except as set forth on Schedule 5.05, no dividends or other
distributions have been declared, paid or made upon any shares of capital
stock of any of the Reliance Standard Insurance Companies or Safety
National nor have any shares of capital stock of any of the Reliance
Standard Insurance Companies or Safety National been redeemed, retired,
purchased or otherwise acquired since December 31, 2005, other than as
reflected in the balance sheets of the Reliance Standard Insurance
Companies or Safety National.
(b) GAAP Financial Statements.
(i) The audited consolidated financial statements of the Borrower as
of the end of, and for, the 2005 Fiscal Year (the "Audited Financial
Statements"), and the unaudited consolidated financial statements of the
Borrower as of the end of, and for, the Fiscal Quarter ended June 30, 2006,
copies of which have been furnished to the Administrative Agent and each of
the Lenders, have been prepared in conformity with GAAP applied on a
consistent basis (except to the extent necessitated by changes in GAAP
during the relevant periods), and accurately present the financial
condition of the Borrower and each of its Subsidiaries as at such dates and
the results of operations for the periods then ended.
(ii) Except as set forth on Schedule 5.05, no dividends or other
distributions have been declared, paid or made upon any shares of capital
stock of the Borrower or any of its Subsidiaries, nor have any shares of
capital stock of the Borrower or any of its Subsidiaries been redeemed,
retired, purchased or otherwise acquired, since December 31, 2005.
(iii) With respect to any representation and warranty which is deemed
to be made after the date hereof by the Borrower, the balance sheet and
statements of operations, of stockholders' equity and of cash flows, which
as of such date shall most recently have been furnished by or on behalf of
the Borrower to each Lender for the purposes of or in connection with this
Agreement or any transaction contemplated hereby, shall have been prepared
in accordance with GAAP consistently applied (except as disclosed therein),
and shall present fairly (in a condensed manner) the consolidated
38
financial condition of the corporations covered thereby as at the dates
thereof and for the periods then ended, subject, in the case of quarterly
financial statements, to normal year-end and audit adjustments.
(c) Material Adverse Change. No Material Adverse Change has occurred since
December 31, 2005.
5.06 LITIGATION AND GUARANTEES. No Material Litigation is pending or
threatened except as set forth (including estimates of the Dollar amounts
involved) in Schedule 5.06. The Borrower and its Subsidiaries have no material
Guarantees other than (a) as provided for or disclosed on Schedule 5.06 or in
the financial statements referred to in Section 5.05 or (b) any Guarantees
consisting of a guarantee by the Borrower with respect to any payment
obligations under Capital Securities.
5.07 NO DEFAULT. Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and each Subsidiary
has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
property of the Borrower and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
5.09 ENVIRONMENTAL COMPLIANCE. There are no claims alleging potential
liability or responsibility for violation of any Environmental Law or any such
violation on the Borrower's and its Subsidiaries' respective businesses,
operations and properties, that could individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
5.10 TAXES. The Borrower and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings diligently conducted and for which adequate reserves
have been provided in accordance with GAAP. There is no proposed tax assessment
against the Borrower or any Subsidiary that would, if made, have a Material
Adverse Effect.
5.11 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal and state Laws. Each Plan that
is intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required
39
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There is no pending or, to the best knowledge of the Borrower,
threatened claim, action or lawsuit, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur that
could reasonably be expected to result in a liability in excess of $10,000,000;
no Pension Plan has any Unfunded Pension Liability in excess of $10,000,000 in
the aggregate for all Pension Plans; neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA) in excess of $10,000,000 in the
aggregate for all Pension Plans; neither the Borrower nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan (and no event has occurred
which, with the giving of notice under Section 4219 of ERISA, would result in
such liability) in excess of $10,000,000 in the aggregate; and neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA that could reasonably be expected to
result in a liability in excess of $10,000,000.
5.12 SUBSIDIARIES. As of the Closing Date, the Borrower has no Subsidiaries
other than those specifically disclosed in Schedule 5.12.
5.13 MARGIN REGULATIONS; INVESTMENT COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U of the FRB) or extending credit for
the purpose of purchasing or carrying margin stock. Following the application of
the proceeds of each Borrowing not more than 25% of the value of the assets
(either of the Borrower only or of the Borrower and its Subsidiaries on a
consolidated basis) subject to the provisions of Section 7.01 or subject to any
restriction contained in any agreement or instrument between the Borrower and
any Lender or any Affiliate of any Lender relating to Indebtedness and within
the scope of Section 8.01(e) will be margin stock.
(b) None of the Borrower, any Person Controlling the Borrower or any
Subsidiary is or is required to be registered as an "investment company" under
the Investment Company Act of 1940.
5.14 DISCLOSURE. The Borrower has disclosed to the Administrative Agent and
the Lenders all agreements, instruments and corporate or other restrictions to
which it or any Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on
40
behalf of the Borrower to the Administrative Agent or any Lender in connection
with the transactions contemplated hereby or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
5.15 COMPLIANCE WITH LAWS. Each of the Borrower and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate with all other such failures, could not reasonably be
expected to have a Material Adverse Effect.
5.16 PROCEEDS. The proceeds of the Loans will be used for general corporate
purposes.
5.17 INSURANCE. The Borrower and its Subsidiaries are adequately insured
for their benefit under policies issued by insurers of recognized
responsibility. No notice of any pending or threatened cancellation or material
premium increase has been received by the Borrower or any of its Subsidiaries
with respect to any of such insurance policies. The Borrower and its
Subsidiaries are in compliance with all material conditions contained in such
insurance policies.
5.18 GOVERNMENTAL AUTHORIZATIONS. The Borrower and its Subsidiaries have
all licenses, franchises, permits and other governmental authorizations
necessary for all businesses presently carried on by them (including ownership
and leasing of the real and personal property owned and leased by them), except
where failure to obtain such licenses, franchises, permits and other
governmental authorizations would not have a Material Adverse Effect.
5.19 SOLVENCY. The Borrower and each of its Subsidiaries is, and after
consummation of this Agreement and after giving effect to all Indebtedness
incurred and Liens created by the Borrower and each of its Subsidiaries in
connection herewith and therewith and the application of proceeds therefrom will
be, Solvent.
5.20 INSURANCE LICENSES. No license (including, without limitation, a
license or certificate of authority from an insurance department), permit or
authorization to transact insurance and reinsurance business (a "License") held
by any of the Reliance Standard Insurance Companies or Safety National, the loss
of which could reasonably be expected to have a Material Adverse Effect, is the
subject of a proceeding for suspension or revocation or any similar proceedings
and, to the best knowledge of the Borrower, there is no sustainable basis for
such a suspension or revocation and no such suspension or revocation is
threatened by any state insurance department.
5.21 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries is in
default under any agreement or instrument to which the Borrower or any of its
Subsidiaries is a party or by which any of their respective properties or assets
is bound or affected, which default could
41
reasonably be expected to materially and adversely affect the financial
condition or operations of the Borrower and its Subsidiaries taken as a whole.
5.22 REPLACEMENT OF SCHEDULES. Any Schedule delivered to the Lenders under
this Article V may be amended and replaced with the consent of the Required
Lenders (such consent not to be unreasonably withheld) so that the
representations and warranties set forth in this Article V shall be true and
correct at the time made by the Borrower.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, the Borrower
shall, and shall (except in the case of Sections 6.01 and 6.02), cause each
Subsidiary to:
6.01 REPORTS, CERTIFICATES AND OTHER INFORMATION. Unless otherwise provided
herein, furnish or cause to be furnished to the Administrative Agent and each
Lender:
(a) Audit Report. As soon as available, but in any event within one hundred
(100) days after the end of each Fiscal Year of the Borrower, copies of the
audited consolidated balance sheet, statement of earnings, stockholders' equity
and cash flows of the Borrower as at the end of such Fiscal Year and an
unaudited consolidating balance sheet of the Borrower as of the end of such
Fiscal Year and the related statements of earnings for such Fiscal Year, in each
case setting forth the figures as of the end of, and for, the previous year,
prepared in reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein, certified (as to the consolidated
balance sheet, statement of earnings, stockholders' equity and cash flows only)
without Qualification by Ernst & Young (or such other independent certified
public accountants of recognized standing acceptable to the Required Lenders);
(b) Quarterly Reports. As soon as available, but in any event within
fifty-two (52) days after the end of each Fiscal Quarter of each Fiscal Year of
the Borrower, copies of the unaudited consolidated balance sheet, statement of
earnings, stockholders' equity and cash flows of the Borrower as at the end of
and for such Fiscal Quarter and an unaudited consolidating balance sheet of the
Borrower as at the end of such Fiscal Quarter and the related unaudited
statements of earnings for such Fiscal Quarter and the portion of the Fiscal
Year through such Fiscal Quarter, and with respect to the consolidated balance
sheet, statement of earnings, stockholders' equity and cash flows setting forth
in comparative form the figures as of the end of, and for, the corresponding
periods of the previous Fiscal Year and the previous Fiscal Quarter, prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and certified by the chief financial officer of
the Borrower as presenting fairly the financial condition and results of
operations of the Borrower and its Subsidiaries (subject to normal year-end and
audit adjustments);
(c) Tax Returns and Reports. If requested by the Administrative Agent or a
Lender, copies of all federal, state, local and foreign Tax Returns and Reports
filed by the Borrower and any of its Subsidiaries;
(d) SAP Financial Statements.
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(i) As soon as possible, but in any event within seventy (70) days
after the end of each Fiscal Year of each of the Reliance Standard
Insurance Companies, Safety National, and, after the consummation of any
other Acquisition permitted under this Agreement, each Acquired Person (to
the extent applicable), a copy of the Annual Statement of such Reliance
Standard Insurance Company, Safety National and such Acquired Person for
such Fiscal Year prepared in accordance with SAP and accompanied by the
certification of the chief financial officer of such Reliance Standard
Insurance Company, Safety National and such Acquired Person that such
financial statement presents fairly, in accordance with SAP, the financial
condition and results of operations of such Reliance Standard Insurance
Company, Safety National and such Acquired Person as of the end of, and
for, the period then ended; and
(ii) As soon as possible, but in any event within fifty-two (52) days
after the end of each Fiscal Quarter of each Fiscal Year of each of the
Reliance Standard Insurance Companies, Safety National, and, after the
consummation of any other Acquisition permitted under this Agreement, each
Acquired Person (to the extent applicable) a copy of the quarterly
statement of such Reliance Standard Insurance Company, Safety National and
such Acquired Person for such Fiscal Quarter, all prepared in accordance
with SAP and accompanied by the certification of the chief financial
officer of such Reliance Standard Insurance Company, Safety National and
such Acquired Person that all such financial statements present fairly in
accordance with SAP the financial condition and results of operations of
such Reliance Standard Insurance Company, Safety National and such Acquired
Person as of the end of, and for, the period then ended;
(e) Compliance Certificate. Contemporaneously with the furnishing of a copy
of each set of the statements and reports provided for in Sections 6.01(a) and
(b), a duly completed certificate, substantially in the form of Exhibit C (the
"Compliance Certificate"), signed by the chief financial officer of the
Borrower, containing, among other things, a computation of, and showing
compliance with, each of the applicable financial ratios and restrictions
contained in Sections 7.13 through 7.17 and to the effect that as of such date,
to the best of Borrower's knowledge, no Default has occurred and is continuing,
or, if there is any such event, describing it and the steps, if any, being taken
to cure it;
(f) Auditors' Materials. Promptly upon the reasonable request of the
Administrative Agent, copies of all management letters and reports regarding the
Borrower or any of its Subsidiaries submitted to the Borrower or its
Subsidiaries by independent public accountants in connection with each annual
audit report made by such accountants of the books of the Borrower or any of its
Subsidiaries;
(g) Notice of Default, Litigation and License Matters. Promptly and without
delay upon learning of the occurrence of any of the following, written notice
thereof, describing the same and the steps being taken by the Borrower with
respect thereto:
(i) the occurrence of a Default,
(ii) the institution of any Material Litigation or the occurrence of
any Material Litigation Development,
43
(iii) the commencement of any dispute which might lead to the material
modification, transfer, revocation, suspension or termination of this
Agreement or any Related Document,
(iv) any Material Adverse Change, or
(v) any announcement by Standard & Poor's or ▇▇▇▇▇'▇ or such other
rating agency whose rating becomes applicable pursuant to the provisions of
the definition of "Applicable Rate" of any change of any Debt Rating of the
Borrower.
(h) ERISA Liability. Promptly upon learning of the occurrence of an ERISA
Event, written notice thereof describing the same and the steps being taken by
Borrower with respect thereto;
(i) Information Concerning the Parent and the Subsidiaries. Promptly upon
learning thereof, written notice of
(i) the occurrence with respect to any of its Subsidiaries or the
Parent of any of the events the occurrence of which in relation to the
Borrower would constitute an Event of Default under Section 8.01(f);
(ii) the execution of any agreement by any of its Subsidiaries to
merge with or consolidate into or with, or purchase or otherwise acquire
all or substantially all of the assets or stock of any class of, or any
partnership or joint venture interest in, any other Person, or for the
sale, transfer, lease or conveyance by any of its Subsidiaries of all or
any substantial part of its assets or sale or assignment without recourse
of any of its receivables; and
(iii) any action which may reasonably be expected to result in a
Change in Control;
(j) Insurance Licenses. Within ten (10) Business Days of such notice,
notice of actual suspension, termination or revocation of any License or
material restriction thereon of any of the Reliance Standard Insurance
Companies, Safety National, and after consummation of any other Acquisition
permitted hereunder, each Acquired Person (to the extent applicable) by any
Governmental Authority that can reasonably be expected to have a Material
Adverse Effect;
(k) Insurance Proceedings. Within ten (10) Business Days of such notice,
notice of any pending or threatened investigation or regulatory proceeding
(other than routine periodic investigations or reviews) by any Governmental
Authority concerning the business, practices or operations of any of the
Reliance Standard Insurance Companies, Safety National, and, after consummation
of any other Acquisition permitted under this Agreement, each Acquired Person
(to the extent applicable) including any agent or managing general agent
thereof, which could reasonably be expected to have a Material Adverse Effect;
(l) Changes in Applicable Insurance Code. Promptly, upon knowledge of the
Borrower, any of the Reliance Standard Insurance Companies, Safety National, or,
after consummation of any other Acquisition permitted under this Agreement, each
Acquired Person
44
(to the extent applicable) to the Administrative Agent (who shall promptly
deliver such notice to the Lenders), notice of any actual or proposed material
changes in any Applicable Insurance Code which could reasonably be expected to
cause a Material Adverse Change;
(m) Revenue Agent Notices. Promptly, and in any event within ten (10) days
of receipt, any revenue agent's reports or statutory notices of deficiency
related to the Borrower or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect;
(n) Notice of Tax Claim. Prompt notice to the Administrative Agent of the
commencement of any claim, audit, examination, notice of deficiency, or other
change or adjustment by any Governmental Authority (a "Tax Claim"), or of the
extension of any statute of limitations regarding Taxes which could reasonably
be expected to have a Material Adverse Effect;
(o) Other Tax Information. Upon request of the Administrative Agent or a
Lender, promptly to the Administrative Agent copies of all correspondence
(including without limitation, notices, requests, explanations, determinations,
schedules, charts and lists) delivered to any Governmental Authority in
connection with any Tax Claim or Taxes; and
(p) Other Information. From time to time such other information and
certifications concerning the Borrower and any of its Subsidiaries as the
Administrative Agent or a Lender may reasonably request.
Documents required to be delivered pursuant to Section 6.01(a), (b) or (d)
(to the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Borrower posts such documents,
or provides a link thereto on the Borrower's website on the Internet at the
website address listed on Schedule 10.02; or (ii) on which such documents are
posted on the Borrower's behalf on an Internet or intranet website, if any, to
which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the Borrower shall deliver paper copies of such
documents to the Administrative Agent or any Lender that requests the Borrower
to deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.01(e) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
The Borrower hereby acknowledges that (a) the Administrative Agent and/or
the Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, "Borrower
Materials") by posting the Borrower Materials on IntraLinks or another similar
electronic system (the "Platform") and (b) certain of
45
the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to the Borrower or its
securities) (each, a "Public Lender"). The Borrower hereby agrees that so long
as the Borrower is the issuer of any outstanding debt or equity securities that
are registered or issued pursuant to a private offering or is actively
contemplating issuing any such securities (w) all Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked
"PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
"PUBLIC," the Borrower shall be deemed to have authorized the Administrative
Agent, the Arranger and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 10.07); (y) all
Borrower Materials marked "PUBLIC" are permitted to be made available through a
portion of the Platform designated "Public Investor;" and (z) the Administrative
Agent and the Arranger shall be entitled to treat any Borrower Materials that
are not marked "PUBLIC" as being suitable only for posting on a portion of the
Platform not designated "Public Investor." Notwithstanding the foregoing, the
Borrower shall be under no obligation to ▇▇▇▇ any Borrower Materials "PUBLIC."
6.02 PAYMENT OF OBLIGATIONS. Pay and discharge, as the same shall become
due and payable, all its material obligations and liabilities, including (a) all
material tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, (b) all lawful claims which, if unpaid, would by
law become a Lien upon its property; and (c) all material Indebtedness, as and
when due and payable, but subject to any subordination provisions contained in
any instrument or agreement evidencing such Indebtedness, unless any of the
foregoing is being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP or SAP, as the case may
be, are being maintained by the Borrower or such Subsidiary.
6.03 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.02; (b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.
6.04 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good working order and condition, ordinary wear and tear excepted; and (b)
make all necessary repairs thereto and renewals and replacements thereof except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
6.05 MAINTENANCE OF INSURANCE. Maintain, with financially sound and
reputable insurance companies which are not Affiliates of the Borrower,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by
46
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons.
6.06 COMPLIANCE WITH LAWS; MATERIAL CONTRACTUAL OBLIGATIONS. Comply in all
material respects with (a) the requirements of all Laws (including ERISA and
Environmental Laws) and all orders, writs, injunctions and decrees applicable to
it or to its business or property, except in such instances in which (i) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (ii) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect; and (b) all material Contractual Obligations, including Guarantees,
except in such instances in which (i) such material Contractual Obligation is
being contested in good faith by appropriate proceedings diligently conducted;
or (ii) the failure to comply therewith could not reasonably be expected to have
a Material Adverse Effect.
6.07 BOOKS AND RECORDS. Maintain proper books of record and account, in
which full, true and correct entries sufficient to prepare financial statements
in conformity with GAAP or SAP, as the case may be, consistently applied shall
be made of all financial transactions and matters involving the assets and
business of the Borrower or such Subsidiary, as the case may be; and maintain
such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Subsidiary, as the case may be.
6.08 INSPECTION RIGHTS. Subject to the Administrative Agent's and the
Lenders' obligations under Section 10.07, permit the Representatives of the
Administrative Agent and each Lender to visit and inspect any of its properties,
to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided that when an Event of Default exists
the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder or any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, the Borrower
shall:
7.01 LIENS. Not, and not permit any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, other than the following (which shall be
referred to as "Permitted Liens"):
(a) Liens for current Taxes not delinquent or for Taxes being contested in
good faith and by appropriate proceedings and with respect to which adequate
reserves are being maintained in accordance with GAAP;
47
(b) Liens in connection with the acquisition or leasing of fixed or capital
assets after the date hereof attaching only to the property being acquired,
provided the Indebtedness secured thereby does not exceed ninety percent (90%)
of the fair market value of such property at the time of acquisition thereof;
(c) Liens shown on Schedule 7.01;
(d) Liens incurred in the ordinary course of business in connection with
workers' compensation, unemployment insurance or other forms of governmental
insurance or benefits or to secure performance of tenders, statutory
obligations, leases and contracts (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety or appeal
bonds;
(e) Liens of mechanics, carriers, materialmen and other like Liens arising
in the ordinary course of business in respect of obligations which are not
delinquent or which are being contested in good faith and by appropriate
proceedings and with respect to which adequate reserves are being maintained in
accordance with GAAP;
(f) Liens arising in the ordinary course of business for sums being
contested in good faith and by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP, or for sums not
due, and in either case not involving any deposits or advances for borrowed
money or the deferred purchase price of property or services;
(g) Liens in favor of any Federal Home Loan Bank;
(h) Liens incurred in connection with the acquisition of Investments
permitted by this Agreement;
(i) Liens arising in connection with reverse repurchase agreements,
securities lending and Swap Contracts entered into in the ordinary course of
business;
(j) Liens pursuant to trust or other security arrangements in connection
with reinsurance agreements under which insurance liabilities are ceded to any
of the Reliance Standard Insurance Companies, Safety National, Safety First or
Safety National Re;
(k) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the businesses of the Borrower and its Subsidiaries;
(l) Liens arising solely by virtue of any statutory or common Law provision
relating to banker's liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided, that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Borrower in excess of those set forth by regulations promulgated by the FRB, and
(ii) such deposit account is not intended by the Borrower or any Subsidiary to
provide collateral to the depository institution;
48
(m) Liens consisting of deposits made by any Subsidiary of the Borrower
(other than a Non-Insurance Subsidiary) with the insurance regulatory authority
in its jurisdiction of domicile or other statutory Liens or Liens or claims
imposed or required by applicable insurance Law or regulation against the assets
of such Subsidiary, in each case in favor of all policyholders of such
Subsidiary and in the ordinary course of such Subsidiary's business;
(n) Liens securing obligations owed to the Borrower by a Subsidiary or owed
by any Subsidiary of the Borrower to any of its other Subsidiaries; and
(o) Other Liens of any type or nature, so long as the aggregate amount of
the obligations at any one time outstanding which are secured by Liens permitted
by this subsection (o) does not exceed $20,000,000.
7.02 CONSOLIDATION, MERGER, ETC. Not, and not permit any of its
Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with,
any other Person, or make any Acquisition except:
(a) any Subsidiary of the Borrower may liquidate or dissolve voluntarily
into, and may merge with and into, the Borrower or any other Subsidiary of the
Borrower; provided that with respect to any merger between Subsidiaries of the
Borrower the percentage of the equity and voting power of the surviving
Subsidiary owned by the Borrower immediately after such merger shall not be less
than the greatest percentage of the equity and voting power owned by the
Borrower in any Subsidiary party to such merger immediately prior thereto;
(b) so long as no Default has occurred and is continuing or would occur
after giving effect thereto and so long as after giving effect thereto, the
Borrower shall be in pro forma compliance with the requirements of this
Agreement, the Borrower and its Subsidiaries may make an Acquisition, through
merger, consolidation, or purchase of all or substantially all of the assets or
capital stock of a Person; and
(c) any Subsidiary (other than any of the Reliance Standard Insurance
Companies and Safety National) engaged primarily in investing in securities may
voluntarily dissolve or liquidate so long as its net assets are distributed in
accordance with the proportionate equity interests of its shareholders, partners
or other beneficial owners.
7.03 ASSET DISPOSITION, ETC. Not, and not permit any of its Subsidiaries
to, sell, or assign, lease, transfer, contribute, convey or otherwise dispose
of, or grant options, warrants or other rights with respect to, any of its
assets to any Person, unless:
(a) such sale, assignment, transfer, lease, contribution, conveyance or
other disposition is in the ordinary course of its business;
(b) the book value of such assets net of related liabilities, together with
the net book value of all other assets sold, transferred, leased, contributed or
conveyed otherwise than in the ordinary course of business by the Borrower or
any of its Subsidiaries pursuant to this clause since December 31, 2005, does
not exceed $50,000,000;
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(c) such sale, transfer, lease, contribution, conveyance or other
disposition has been consented to in writing by the Required Lenders (it being
understood such Required Lenders shall have no obligation to so consent); or
(d) such sale, transfer, contribution or conveyance is in connection with
any liquidation, dissolution, consolidation or merger permitted under Section
7.02.
7.04 DIVIDENDS, ETC. Not declare, pay or make any dividend or distribution
(in cash, property or obligations) on any shares of any class of capital stock
(now or hereafter outstanding) of the Borrower or on any warrants, options or
other rights with respect to any shares of any class of capital stock (now or
hereafter outstanding) of the Borrower (other than dividends or distributions
payable in its common stock or warrants to purchase its common stock or splitups
or reclassifications of its stock into additional or other shares of its common
stock) or apply, or permit any of its Subsidiaries to apply, any of its funds,
property or assets to the purchase, redemption, sinking fund or other retirement
of any shares of any class of capital stock (now or hereafter outstanding) of
the Borrower or any option, warrant or other right to acquire shares of the
Borrower's capital stock (other than any such payment pursuant to stock
appreciation rights granted and exercised in accordance with applicable rules
and regulations of the Securities and Exchange Commission); or make any deposit
for any of the foregoing purposes, unless, after giving effect thereto, no
Default shall have occurred and be continuing and the Borrower shall be in pro
forma compliance with the requirements of this Agreement.
7.05 INVESTMENTS. Not, and not permit any of its Subsidiaries to, make,
incur, assume or suffer to exist any Investment in any other Person, except:
(a) Investments in cash and Cash Equivalents;
(b) in the ordinary course of business, Investments by the Borrower in any
of its Subsidiaries, or by any such Subsidiary in any of its or the Borrower's
Subsidiaries or the Borrower, by way of contributions to capital or loans or
advances; and
(c) other Investments by any of the Borrower and its Subsidiaries which
shall not violate any of the following guidelines:
(i) All Investments by the Reliance Standard Insurance Companies,
Safety National and any Acquired Person (if an insurance company) shall be
in compliance with the Applicable Insurance Code(s) of each Reliance
Standard Insurance Company's, Safety National's and such Acquired Person's
state of domicile or approved by the applicable Department; and
(ii) Investments by the Borrower and its Subsidiaries in securities of
a single issuer (other than (A) U.S. Government Securities; (B) overnight
investments in securities rated at least A-2 by Standard & Poor's or P-2 by
▇▇▇▇▇'▇ which are purchased through short-term asset management accounts
offered by any commercial banks organized under the laws of the United
States which are Lenders or which have a combined capital and surplus in
excess of $500,000,000; (C) repurchase agreements collateralized by any of
the securities referenced in clauses (A) and (B), above or clause (2)
below; and (D) investments in the Borrower or any of its Affiliates) shall
not exceed
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(1) except as to securities covered by clause (2) below, the lesser of 3%
of the consolidated total assets of the Borrower and its Subsidiaries or
20% of Consolidated Equity of the Borrower; or (2) as to asset-backed
securities backed by a single pool of assets that are Investment Grade
Securities, 5% of the consolidated total assets of the Borrower and its
Subsidiaries; provided that for the purposes of determining compliance with
this Section 7.05(c)(ii), (1) the Tersk Investment shall not be considered
as an Investment in a single issuer; instead, the Investments of Tersk LLC,
to the extent of the Borrower's and its Subsidiaries' proportionate
interests therein, shall be deemed to be Investments of the Borrower and
its Subsidiaries (but not to exceed in the aggregate for such purpose,
however, the amount of the Tersk Investment), and (2) Investments of the
Borrower and its Subsidiaries in the Structured Notes shall not be
considered as Investments in a single issuer;
provided, however, that for purposes of applying Section 7.05(c), Investments by
Subsidiaries of the Borrower which are not wholly-owned Subsidiaries shall only
be taken into account to the extent that the Borrower's direct or indirect
proportionate equity interest of such Subsidiary is taken into account in
calculating Consolidated Equity of the Borrower.
7.06 TAKE OR PAY CONTRACTS. Not, and not permit any of its Subsidiaries to,
enter into or be a party to any arrangement for the purchase of materials,
supplies, other property or services if such arrangement by its express terms
requires that payment be made by the Borrower or such Subsidiary regardless of
whether such materials, supplies, other property or services are delivered or
furnished to it.
7.07 REGULATION U. Not, and not permit any of its Subsidiaries to, use or
permit any proceeds of the Loans to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of "purchasing or
carrying margin stock" within the meaning of Regulation U.
7.08 SUBSIDIARIES. Notwithstanding any provision of this Agreement to the
contrary, not, and not permit any of its Subsidiaries to, create or permit to
exist any Subsidiary other than the Subsidiaries listed on Schedule 5.12 unless
the Administrative Agent and the Lenders are promptly notified of the creation
or existence of any such Subsidiary.
7.09 OTHER AGREEMENTS. Not, and not permit any of its Subsidiaries to,
enter into any agreement containing any provision which (a) would be violated or
breached by the performance of its obligations hereunder or under any instrument
or document delivered or to be delivered by it hereunder or in connection
herewith, (b) prohibits or restricts the creation or assumption of any Lien
(other than Permitted Liens) upon its properties, revenues or assets (whether
now owned or hereafter acquired) as security for the Liabilities hereunder, (c)
prohibits or restricts the ability of any of its Subsidiaries to make dividends
or advances or payments to the Borrower, or (d) constitutes an agreement to a
limitation or restriction of the type described in clauses (a) through (c) with
respect to any other Indebtedness.
7.10 BUSINESS ACTIVITIES. Not, and not permit any of its Subsidiaries to,
engage in any type of business except (a) the businesses in which the Borrower
and its Subsidiaries are engaged as of the date hereof, (b) insurance and
insurance-related businesses and insurance services of all types, (c) investment
management services for Persons other than the Borrower and its
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Subsidiaries and (d) the acquisition or origination of financial assets,
including but not limited to mortgage, automobile and other consumer finance
loans, and the origination of securitizations based on such financial assets.
7.11 TRANSACTIONS WITH AFFILIATES. Not, and not permit any of its
Subsidiaries to, enter into, or cause, suffer or permit to exist any
arrangement, Reinsurance Agreement, contract with or investment in any of its
other Affiliates which is not a directly or indirectly wholly-owned Subsidiary
of the Borrower unless such arrangement (a) is fair and equitable to the
Borrower or such Subsidiary, (b) is of a sort which would be entered into by a
prudent Person in the position of the Borrower or such Subsidiary with a Person
which is not one of its Affiliates, and (c) is on terms which are not less
favorable to the Borrower or such Subsidiary than are obtainable from a Person
which is not one of its Affiliates.
7.12 OWNERSHIP OF RSL AND SAFETY NATIONAL. Not cease to own, directly or
indirectly, free and clear of all Liens, (a) 100% of the outstanding shares of
voting stock of RSL on a fully diluted basis and (b) 100% of the outstanding
shares of voting stock and voting power of Safety National on a fully diluted
basis.
7.13 CONSOLIDATED NET WORTH. Not permit Consolidated Net Worth to be less
than the sum of (a) $732,851,000 plus (b) 50% of consolidated Net Income (if
positive) for each Fiscal Quarter commencing after June 30, 2006 plus (c) 50% of
net equity proceeds received after June 30, 2006. For purposes of calculating
Consolidated Net Worth, any Capital Securities Amount shall be included therein
to the same extent that such amount would be included in Consolidated Equity
pursuant to the definition thereof.
7.14 DEBT TO CAPITAL. Not permit the Debt to Capital Ratio to exceed 0.30:1
at any time.
7.15 RISK-BASED CAPITAL RATIO. Not permit the Risk-Based Capital Ratio of
RSL to fall below 200% and not permit the Risk-Based Capital Ratio of Safety
National to fall below 110%. This ratio shall be measured as of the end of each
Fiscal Year for the Fiscal Year then ended.
7.16 PRO FORMA RISK-BASED CAPITAL. Not permit the Risk-Based Capital Ratio
of Safety National (calculated as if Safety National's excess workers'
compensation premiums were reported under the workers' compensation line of
business for purposes of calculating Safety National's Risk Based Capital Ratio)
to fall below 200%. This ratio shall be measured as of the end of each Fiscal
Year for the Fiscal Year then ended.
7.17 SUBSIDIARY INDEBTEDNESS. Not permit any Subsidiary to incur any
Subsidiary Indebtedness except Subsidiary Indebtedness in an aggregate principal
amount for all Subsidiaries of not more than $20,000,000 at any one time
outstanding.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of
Default:
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(a) Non-Payment. The Borrower fails to pay when and as required to be paid
herein, any amount of principal of any Loan, or within three days after the same
becomes due, any interest on any Loan, or any commitment, utilization or other
fee due hereunder, or (iii) within five days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01(i), or Article VII (other
than Sections 7.05, 7.06, 7.08 or 7.11 which shall be governed by Section
8.01(c)); or
(c) Other Defaults. The Borrower fails to perform or observe any other
covenant or agreement (not specified in clause (a) or (b) above) contained in
any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading in any
material respect when made or deemed made; or
(e) Cross-Default. (A) The Borrower or any Material Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or there
occurs under any Swap Contract an Early Termination Date (as defined in such
Swap Contract) resulting from (C) any event of default under such Swap Contract
as to which the Borrower or any Material Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (D) any Termination Event (as so defined)
under such Swap Contract as to which the Borrower or any Material Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Borrower or such Material Subsidiary as a result thereof is
greater than the Threshold Amount and the amount owed by the Borrower or
Material Subsidiary thereunder is not paid within 15 days of the date such
payment is due; or
(f) Insolvency Proceedings, Etc. The Borrower or any Material Subsidiary
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator,
53
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any material part of its property is instituted without
the consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Material
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against the Borrower or any Material
Subsidiary a final non-appealable judgment or order for the payment of money in
an aggregate amount exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance (including but not limited to reinsurance
coverage) as to which the insurer or reinsurer does not dispute coverage) which
is not satisfied within fifteen (15) days from the date thereof, or any one or
more non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either
case, enforcement proceedings are commenced by any creditor upon such judgment
or order, or there is a period of 10 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000,
or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $10,000,000; or
(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or the Borrower or any other Person contests in any manner the
validity or enforceability of any Loan Document; or the Borrower denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. Any Change of Control occurs.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans to be terminated,
whereupon such commitments and obligation shall be terminated;
54
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and
(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided that upon the occurrence of an actual or deemed entry of an order for
relief with respect to the Borrower under the Debtor Relief Laws, the obligation
of each Lender to make Loans shall automatically terminate, and the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable as set forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall be applied by the Administrative Agent in the
following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORITY. Each of the Lenders hereby irrevocably
appoints Bank of America to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Administrative
Agent and the Lenders, and the Borrower shall not have rights as a third party
beneficiary of any of such provisions.
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9.02 RIGHTS AS A LENDER. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
9.03 EXCULPATORY PROVISIONS. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower or
a Lender.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV
56
or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to the Administrative Agent.
9.04 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
9.05 DELEGATION OF DUTIES. The Administrative Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other
Loan Document by or through any one or more sub agents appointed by the
Administrative Agent. The Administrative Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
9.06 RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative Agent may at
any time give notice of its resignation to the Lenders and the Borrower. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, subject to the consent of the Borrower (such consent not to be
unreasonably withheld), to appoint a successor from the Lenders. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may,
after consulting with the Borrower and the Lenders, appoint a successor
Administrative Agent from among the Lenders; provided that if the Administrative
Agent shall notify the Borrower and the Lenders that no Lender has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except for duties and obligations having arisen prior to the
effectiveness of such resignation) and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly, until such time as a
successor Administrative Agent is appointed as provided for above in this
Section. (For the avoidance of doubt, it is agreed that the Administrative
Agent's resignation shall not be effective until the earlier of 30 days after
the notice of its resignation or the appointment under the terms of this Section
of a successor.) Upon the acceptance of a successor's appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights,
57
powers, privileges and duties of the retiring (or retired) Administrative Agent,
and the retiring Administrative Agent shall be discharged from all of its duties
and obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section and except for duties and
obligations having arisen prior to the effectiveness of such resignation). The
fees payable by the Borrower to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the retiring Administrative Agent's
resignation hereunder and under the other Loan Documents, the provisions of this
Article and Section 10.04 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.
9.07 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.
9.08 NO OTHER DUTIES, ETC. Anything herein to the contrary notwithstanding,
none of the Book Manager, the Joint Lead Arrangers, Co-Syndication Agents or
Co-Documentation Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent or
a Lender hereunder.
9.09 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Borrower, the Administrative Agent (irrespective of whether the principal of
any Loan shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 10.04) allowed in such judicial proceeding;
and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
58
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.07 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower, and acknowledged by the Administrative Agent, and each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on,
any Loan, or (subject to clause (ii) of the second proviso to this Section
10.01) any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
provided, however, that only the consent of the Required Lenders shall be
necessary to amend the definition of "Default Rate" or to waive any obligation
of the Borrower to pay interest at the Default Rate;
(e) change Section 2.11 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender; or
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend,
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waive or otherwise modify any rights hereunder or make any determination or
grant any consent hereunder, without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (ii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.
10.02 NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower or the Administrative Agent, to the address,
telecopier number, electronic mail address or telephone number specified
for such Person on Schedule 10.02; and
(ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, postage prepaid, shall be deemed to have been given when
received; notices sent by telecopier shall be deemed to have been given when
sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
business day for the recipient). Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall be
effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Lender pursuant to Article II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested"
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function, as available, return e-mail or other written acknowledgement),
provided that if such notice or other communication is not sent during the
normal business hours of the recipient, such notice or communication shall be
deemed to have been sent at the opening of business on the next business day for
the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor.
(c) The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
"Agent Parties") have any liability to the Borrower, any Lender or any other
Person for losses, claims, damages, liabilities or expenses of any kind (whether
in tort, contract or otherwise) arising out of the Borrower's or the
Administrative Agent's transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to the Borrower, any Lender or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or
actual damages).
(d) Change of Address, Etc. Each of the Borrower and the Administrative
Agent may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the Borrower and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.
(e) Reliance by Administrative Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices) purportedly given by or on behalf of the Borrower even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify the Administrative Agent,
each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other telephonic communications with the Administrative Agent
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may be recorded by the Administrative Agent, and each of the parties hereto
hereby consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender, or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out of
pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender (including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender), and
shall pay, without duplication, all reasonable fees and time charges for
attorneys who may be employees of the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with the Loans made hereunder, including all
such reasonable out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.
(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof) and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee),
and shall indemnify and hold harmless each Indemnitee, without duplication, from
all reasonable fees and time charges and disbursements for attorneys who may be
employees of any Indemnitee, incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by the Borrower arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder, the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower, and regardless of whether
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any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower against an Indemnitee for breach of such Indemnitee's
obligations hereunder or under any other Loan Document, if the Borrower has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction unless such damages are
determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent) or such
Related Party, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) or against any Related Party of any of the foregoing acting for
the Administrative Agent (or any such sub-agent) in connection with such
capacity. The obligations of the Lenders under this subsection (c) are subject
to the provisions of Section 2.10(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby unless
such damages are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.
(e) Payments. All amounts due under this Section shall be payable not later
than thirty days after demand therefor.
(f) Survival. The agreements in this Section shall survive the resignation
of the Administrative Agent, the replacement of any Lender, the termination of
the Aggregate Commitments and the repayment, satisfaction or discharge of all
the other Obligations.
10.05 PAYMENTS SET ASIDE. To the extent that any payment by or on behalf of
the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in
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its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect. The obligations of the Lenders under clause
(b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.
10.06 SUCCESSORS AND ASSIGNS.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation in accordance with
the provisions of subsection (d) of this Section, or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection (f)
of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or
more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that any such assignment shall be subject to the
following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment and the Loans at the time owing
to it or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this
Section, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the Commitment
is not then in effect, the principal outstanding balance of the Loans
of the assigning Lender subject to each such assignment, determined as
of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if "Trade
Date" is specified in the Assignment and Assumption, as of the Trade
Date, shall
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not be less than $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing,
the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments
from members of an Assignee Group to a single assignee (or to an
assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum
amount has been met.
(ii) Proportionate Amounts. Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights
and obligations under this Agreement with respect to the Loans or the
Commitment assigned;
(iii) Required Consents. No consent shall be required for any
assignment except to the extent required by subsection (b)(i)(B) of this
Section and, in addition:
(A) the consent of the Borrower (such consent not to be
unreasonably withheld or delayed) shall be required unless (1) an
Event of Default has occurred and is continuing at the time of such
assignment or (2) such assignment is to a Lender, an Affiliate of a
Lender or an Approved Fund; and
(B) the consent of the Administrative Agent (such consent not to
be unreasonably withheld or delayed) shall be required if such
assignment is to a Person that is not a Lender, an Affiliate of such
Lender or an Approved Fund with respect to such Lender.
(iv) Assignment and Assumption. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee in the amount of
$3,500, provided, however, that the Administrative Agent may, in its sole
discretion, elect to waive such processing and recordation fee in the case
of any assignment. The assignee, if it is not a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Company. No such assignment shall be made to the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
(vi) No Assignment to Natural Persons. No such assignment shall be
made to a natural person.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement, other than its obligations under Section 10.07
relating to Information received by such Lender, (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
65
hereto) but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to
the effective date of such assignment. Upon request, the Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall, to
the extent permitted by law, be prima facie evidence of the matters set forth
therein, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries ) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that materially adversely affects such Participant. Subject to
subsection (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section.
(e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under any provision of Article III than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent expressly
acknowledging such entitlement. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 3.01 unless
the Borrower is notified
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of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 3.01(e) as though it were a
Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note(s), if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(g) Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
10.07 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY AND NON-USE. Each
of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates' respective
directors, officers, employees, agents, advisors and representatives who, in
each case, needs to know the Information in connection with the exercise of its
rights, or performance of its obligations, under this Agreement or any other
Loan Document (collectively, the "Representatives") (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, any Lender or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower. Each of the
Administrative Agent and the Lenders further agrees it will use the Information
only in connection with the exercise of its rights, or performance of its
obligations, or in connection with other business with the Borrower or its
Affiliates.
For purposes of this Section, "Information" means all information received
from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary
or any of their respective
67
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower or any Subsidiary. Any Person required to maintain
the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
Federal and state securities Laws.
10.08 RIGHT OF SETOFF. If an Event of Default shall have occurred and be
continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement or any other
Loan Document and although such obligations of the Borrower may be contingent or
unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender or their respective Affiliates may have. Each Lender agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
10.09 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
10.10 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties
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relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
10.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Loan, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied.
10.12 SEVERABILITY. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.13 REPLACEMENT OF LENDERS. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender, then the Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 10.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment
fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.05) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);
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(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender of a claim for
compensation or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation (except for the circumstance of such Lender
having been a Defaulting Lender) cease to exist.
10.14 NO ADVISORY OR FIDUCIARY RESPONSIBILITY. In connection with all
aspects of each transaction contemplated hereby, the Borrower acknowledges and
agrees that: (i) the credit facility provided for hereunder and any related
arranging or other services in connection therewith (including in connection
with any amendment, waiver or other modification hereof or of any other Loan
Document) are an arm's-length commercial transaction between the Borrower and
its Affiliates, on the one hand, and the Administrative Agent, the Arranger, and
the Co-Arranger, on the other hand, and the Borrower is capable of evaluating
and understanding and understand and accept the terms, risks and conditions of
the transactions contemplated hereby and by the other Loan Documents (including
any amendment, waiver or other modification hereof or thereof); (ii) in
connection with the process leading to such transaction, the Administrative
Agent, the Arranger, and the Co-Arranger each is and has been acting solely as a
principal and is not the financial advisor, agent or fiduciary, for any of the
Borrower or any of its Affiliates, stockholders, creditors or employees or any
other Person; (iii) neither the Administrative Agent, the Arranger nor the
Co-Arranger has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Borrower with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to
any amendment, waiver or other modification hereof or of any other Loan Document
(irrespective of whether the Administrative Agent, the Arranger or the
Co-Arranger has advised or is currently advising the Borrower or its Affiliates
on other matters) and neither the Administrative Agent, the Arranger nor the
Co-Arranger has any obligation to the Borrower or its Affiliates with respect to
the transactions contemplated hereby except those obligations expressly set
forth herein and in the other Loan Documents; (iv) the Administrative Agent, the
Arranger and the Co-Arranger and their respective Affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the
Borrower and its Affiliates, and neither the Administrative Agent, the Arranger
nor the Co-Arranger has any obligation to disclose any of such interests by
virtue of any advisory, agency or fiduciary relationship; and (v) the
Administrative Agent, the Arranger and the Co-Arranger have not provided and
will not provide any legal, accounting, regulatory or tax advice with respect to
any of the transactions contemplated hereby (including any amendment, waiver or
other modification hereof or of any other Loan Document) and the Borrower has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate. The Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the
Administrative Agent, the Arranger and the Co-Arranger with respect to any
breach or alleged breach of agency or fiduciary duty.
10.15 GOVERNING LAW; JURISDICTION; ETC.
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(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS.
(b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS SITTING IN ▇▇▇▇ COUNTY AND
OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF ILLINOIS, AND
ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH ILLINOIS STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR
ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS BY CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
10.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
71
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.17 USA PATRIOT ACT NOTICE. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
DELPHI FINANCIAL GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-1
BANK OF AMERICA, N.A., as
Administrative Agent and as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-2
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-3
HSBC BANK USA, NATIONAL
ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-4
US BANK NATIONAL ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-5
KEYBANK NATIONAL ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-6
THE NORTHERN TRUST COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-7
LA SALLE BANK NATIONAL ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-8